CALGARY, ALBERTA - (Marketwire - Jan. 28, 2010) - Orion Oil & Gas Corporation (TSX:OIP) ("Orion" or the "Company") is pleased to announce its reserves as at December 31, 2009 and filing of information regarding the Company's crude oil and natural gas reserves for the year ended December 31, 2009 in accordance with the requirements of Canadian Securities Administrators' National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.
Orion's Statement of Reserves Data and Other Oil and Gas Information Form NI 51-101 F1; Report on Reserves Data by Independent Evaluator Form 51-101 F2; and Report of Management and Directors on Reserves Data and Other Information Form 51-101 F3; are now accessible from the SEDAR website at www.sedar.com.
Highlights
The Company's oil and gas reserves were evaluated for the year ended December 31, 2009, by GLJ Petroleum Consultants Ltd. ("GLJ"), independent reserves evaluators, in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101").
The proved plus probable Company interest reserves were 18.5 million boe, and proved plus probable plus possible reserves were 28.3 million boe. Total proved reserves were 12.4 million boe.
The Company's proved plus probable net present value, before tax and discounted at 10%, is $332.9 million. The Company's proved plus probable plus possible net present value, before tax and discounted at 10%, is $459.4 million. As previously announced Orion has an aggressive, fully funded development program underway to ramp production and cashflow to optimum plateau levels. The 2010-2011 capital programs are being directed at Proven, Probable and Possible reserves.
The following tables provide breakdowns of Orion's reserves and reserve values, based on GLJ's independent reserve evaluation for the year ended December 31, 2009. Detailed reserve information is presented in the Statement of Reserves Data, Form F1, filed on SEDAR January 28, 2010.
SUMMARY OF OIL AND GAS RESERVES
AS OF DECEMBER 31, 2009
FORECAST PRICES AND COSTS
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Light and Medium
Crude Oil Heavy Oil
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Reserves Category Gross Net (1) Gross Net (1)
(Mbbls) (Mbbls) (Mbbls) (Mbbls)
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Proved Developed Producing
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Beaverhill Lake (Kaybob)
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Redwater 1,007 805
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Bigstone
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Total Proved Developed Producing 1,007 805 - -
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Total Proved
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Beaverhill Lake (Kaybob)
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Redwater 1,717 1,378
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Bigstone
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Total Proved 1,717 1,378 - -
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Probable
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Beaverhill Lake (Kaybob) - - - -
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Redwater 802 612 - -
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Bigstone - - - -
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Total Probable 802 612 - -
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Total Proved plus Probable
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Beaverhill Lake (Kaybob)
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Redwater 2,519 1,990
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Bigstone
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Total Proved plus Probable 2,519 1,990 - -
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Possible Reserves
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Beaverhill Lake (Kaybob) - - - -
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Redwater (2) - - - -
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Bigstone (2) - - - -
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Total Possible - - - -
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Total Proved plus Probable plus
Possible
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Beaverhill Lake (Kaybob)
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Redwater (2) 2,519 1,990 - -
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Bigstone (2) - - - -
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Total Proved plus Probable plus
Possible 2,519 1,990 - -
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Natural Total Oil
Natural Gas Gas Liquids Equivalent
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Reserves Category Gross Net (1) Gross Net (1) Gross Net (1)
(MMcf) (MMcf) (Mbbls) (Mbbls) (Mbbls) (Mbbls)
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Proved Developed
Producing - -
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Beaverhill Lake
(Kaybob) 18,043 16,360 2,021 1,832 5,028 4,559
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Redwater 2,068 1,601 1,352 1,072
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Bigstone 2,639 2,639 1.0 439.8 441.0
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- -
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Total Proved
Developed
Producing 22,750 20,600 2,021 1,833 6,820 6,072
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Total Proved - -
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Beaverhill Lake
(Kaybob) 39,837 36,121 4,462 4,046 11,102 10,066
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Redwater 3,626 2,842 2,321 1,852
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Bigstone 2,639 2,639 1.0 1.0 440.8 440.8
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- -
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Total Proved 46,102 41,602 4,463 4,047 13,864 12,359
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Probable - -
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Beaverhill Lake
(Kaybob) 20,800 18,860 2,329 2,112 5,796 5,255
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Redwater 1,808 1,351 - - 1,103 837
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Bigstone 680 680 - - 113 113
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- -
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Total Probable 23,288 20,891 2,329 2,112 7,012 6,206
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Total Proved plus
Probable - -
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Beaverhill Lake
(Kaybob) 60,637 54,981 6,791 6,158 16,897 15,321
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Redwater 5,434 4,193 3,425 2,689
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Bigstone 3,319 3,319 1.0 1.0 554.2 554.2
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- -
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Total Proved plus
Probable 69,390 62,493 6,792 6,159 20,876 18,565
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Possible Reserves - -
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Beaverhill Lake
(Kaybob) 38,351 34,775 4,296 3,895 10,688 9,691
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Redwater (2) - - - - - -
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Bigstone (2) - - - - - -
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- -
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Total Possible 38,351 34,775 4,296 3,895 10,688 9,691
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Total Proved plus
Probable plus
Possible - -
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Beaverhill Lake
(Kaybob) 98,988 89,756 11,087 10,053 27,585 25,012
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Redwater (2) 5,434 4,193 - - 3,425 2,689
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Bigstone (2) 3,319 3,319 1 1 554 554
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- -
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Total Proved plus
Probable plus
Possible 107,741 97,268 11,088 10,054 31,564 28,255
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(1) - Net is Company Working Interest
(2) - The Possible Reserves were assumed to be immaterial at this time and
not quantified for Redwater and Bigstone properies
SUMMARY OF NET PRESENT VALUES OF FUTURE NET REVENUE
AS OF DECEMBER 31, 2009
FORECAST PRICES AND COSTS
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Before Deducting Income Taxes Discounted at
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Reserves Category 0% 5% 10% 15% 20%
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(MM$) (MM$) (MM$) (MM$) (MM$)
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Proved Developed Producing
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Beaverhill Lake (Kaybob) 140.2 108.6 88.5 74.8 65.0
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Redwater 39.5 33.5 29.0 25.7 23.0
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Bigstone
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Drilling Credit 5.7 4.9 4.3 3.8 3.5
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Total Proved Developed
Producing 185.5 147.0 121.8 104.3 91.5
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Total Proved
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Beaverhill Lake (Kaybob) 310.5 223.5 171.1 136.9 113.2
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Redwater 56.1 44.6 36.5 30.5 25.9
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Bigstone 5.8 4.9 4.3 3.8 3.4
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Drilling Credit 6.4 6.3 6.1 6.0 5.9
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Total Proved 378.8 279.3 217.9 177.2 148.5
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Probable Reserves
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Beaverhill Lake (Kaybob) 188.7 126.1 93.7 74.5 62.0
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Redwater 36.4 25.4 18.8 14.5 11.6
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Bigstone 1.6 1.1 0.8 0.6 0.5
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Drilling Credit 1.9 1.8 1.8 1.8 1.7
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Total Probable 228.5 154.5 115.0 91.4 75.8
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Total Proved plus Probable
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Beaverhill Lake (Kaybob) 499.2 349.6 264.7 211.4 175.2
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Redwater 92.5 70.1 55.2 45.0 37.5
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Bigstone 7.3 6.0 5.1 4.4 3.9
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Drilling Credit 8.3 8.1 7.8 7.7 7.6
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Total Proved plus Probable 607.3 433.8 332.9 268.5 224.3
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After Deducting Income Taxes Discounted at
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Reserves Category 0% 5% 10% 15% 20%
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(MM$) (MM$) (MM$) (MM$) (MM$)
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Proved Developed Producing
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Beaverhill Lake (Kaybob)
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Redwater
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Bigstone
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Drilling Credit
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Total Proved Developed
Producing 177.9 141.8 118.2 101.6 89.5
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Total Proved
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Beaverhill Lake (Kaybob)
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Redwater
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Bigstone
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Drilling Credit
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Total Proved 323.5 240.2 188.7 154.3 130.0
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Probable Reserves
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Beaverhill Lake (Kaybob)
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Redwater
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Bigstone
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Drilling Credit
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Total Probable 171.6 115.6 85.9 68.1 56.5
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Total Proved plus Probable
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Beaverhill Lake (Kaybob)
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Redwater
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Bigstone
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Drilling Credit
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Total Proved plus Probable 495.2 355.8 274.6 222.5 186.6
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Before Deducting Income Taxes Discounted at
0% 5% 10% 15% 20%
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Possible Reserves (MM$) (MM$) (MM$) (MM$) (MM$)
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Beaverhill Lake (Kaybob) 326.8 189.1 126.5 92.6 71.9
Redwater (2) - - - - -
Bigstone (2) - - - - -
- - - - -
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Total Possible 326.8 189.1 126.5 92.6 71.9
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Total Proved plus Probable
plus Possible
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Beaverhill Lake (Kaybob) 826.0 538.7 391.2 304.0 247.1
Redwater (2) 92.5 70.1 55.2 45.0 37.5
Bigstone (2) 7.3 6.0 5.1 4.4 3.9
Drilling Credit 8.3 8.1 7.8 7.7 7.6
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Total Proved plus Probable
plus Possible 934.1 622.9 459.4 361.1 296.2
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(2) - The Possible Reserves for Redwater and Bigstone were assumed
immaterial at this time and not quantified
Definitions:
(a) "Proved" reserves are those reserves that can be estimated with a high
degree of certainty to be recoverable. It is likely that the actual
remaining quantities recovered will exceed the estimated proved
reserves.
(b) "Probable" reserves are those additional reserves that are less certain
to be recovered than proved reserves. It is equally likely that the
actual remaining quantities recovered will be greater or less than the
sum of the estimated proved plus probable reserves.
(c) "Possible Reserves" are those additional reserves that are less certain
to be recovered than probable reserves. There is only a 10-per-cent
probability that the quantities actually recovered will equal or exceed
the sum of the proven plus probable plus possible reserves.
(d) "Developed" reserves are those reserves that are expected to be
recovered from existing wells and installed facilities or, if facilities
have not been installed, that would involve a low expenditure (e.g. when
compared to the cost of drilling a well) to put the reserves on
production.
(e) "Developed Producing" reserves are those reserves that are expected to
be recovered from completion intervals open at the time of the estimate.
These reserves may be currently producing or, if shut-in, they must have
previously been on production, and the date of resumption of production
must be known with reasonable certainty.
(f) "Developed Non-Producing" reserves are those reserves that either have
not been on production, or have previously been on production, but are
shut in, and the date of resumption of production is unknown.
(g) "Undeveloped" reserves are those reserves expected to be recovered from
know accumulations where a significant expenditure (for example, when
compared to the cost of drilling a well) is required to render them
capable of production. They must fully meet the requirements of the
reserves classification (proved, probable, possible) to which they are
assigned.
(h) The Net Present Value (NPV) based on GLJ Forecast Pricing and costs,
before taxes, discounted at 10%. The estimated NPV does not necessarily
represent the fair market value of our reserves. There is no assurance
that forecast prices and costs assumed in the GLJ evaluations will be
attained, and variances could be material.
Summary Information Relating to Orion
Orion through its wholly-owned subsidiary Orion N.A., is engaged in the exploration for and development of oil and natural gas interests located primarily in the Kaybob, Redwater and Bigstone areas of Alberta. Orion N.A.'s current production is 2,650 boe/d, which is comprised of approximately 45% light oil and natural gas liquids and 55% natural gas. At its Kaybob property, a natural gas condensate field, Orion N.A. has a 91% working interest in 25,600 gross acres. Orion N.A. has drilled 8 wells at Kaybob, with a 100% success rate. At its Redwater property, a light oil field, Orion N.A. has mainly 100% working interest in 8,786 gross acres. Orion N.A. has drilled 14 wells at Redwater, with a 100% success rate. At its Bigstone property, a natural gas field, Orion N.A. has 100% working interest in 1,920 acres. Orion N.A. is operator at its Kaybob, Redwater and Bigstone properties. Orion N.A. has sufficient capital to fully fund the development of its properties.
Note: boe's may be misleading, particularly if used in isolation. In accordance with NI 51-101, a boe conversion ratio of 6 Mcf:1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
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